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While going through the Kaplan revision kit,I have come across a unusual solution for capital allowance.It is like this:
Special Rate pool has balance of 21000 appx. and all of the items of the pool have been disposed during the year for 12000 appx. The business is not ceasing as well.
So while solving we get 9000 as balancing allowance. We can’t add this to capital allowance so we leaveit like it is.But the problem arose when the solution contained further capital allowance for 9000 at 8%. I don’t understand why; all og the assets have been disposed of the pool.
Please help me?
i know they only arise on cessation but does that mean capital allowance should be calculated on balancing allowance figure and also technically there are NO assets remaining to provide capital allowance for?
There is no balancing allowance as there is no cessation of trade – the normal CA comp is continued with WDA being claimed irrespective of there being no assets left within the pool – have you worked through the OT lectures?
I haven’t gone through the online lectures,but thankyou for clarifying it to me.
My tutor said that the allowance should be left as it is and wda should be calculated for others.I think I am good now.Thanks again.
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